House Democrats on Thursday added an ambitious program to President Biden’s $3.5 trillion social welfare package that would phase out fossil fuels in electricity generation.
The program would pay utility companies to jettison natural gas and coal in favor of “green” alternatives like wind and solar.
“It’s critical that we make the necessary investments now to achieve President Biden’s goal of 100% clean electricity by 2035,” said Energy and Commerce Committee Chairman Frank Pallone, New Jersey Democrat, who spearheaded the crafting of the plan and dubbed it the Clean Electricity Performance Program.
To achieve the goal, Democrats would spend $150 billion on the program throughout 2030. Electric suppliers would be eligible for the incentives, which would take the form of federal grants, if they increase the amount of “clean energy” supplied to customers.
To succeed, utilities would have to increase their share of clean energy by 4% annually. Companies that fail to reach the goal would be fined by the Department of Energy.
To hasten the transition away from fossil fuels and make the program successful, Democrats are eyeing a series of “taxes and fees” on natural gas and coal. Many of those are still being debated and have yet to be made public.
For instance, the Energy and Commerce Democrats are negotiating with lawmakers on the House’s chief tax-writing panel, the Ways and Means Committee, to include the fees in the final package.
Lawmakers have already agreed to include a fee on methane. The short-lived, but potent greenhouse gas is a primary component of natural gas.
“We’re looking at a carrot-and-stick approach to the clean electricity,” said a Democratic staffer involved in crafting the program, who requested anonymity to discuss the ongoing negotiations. “Nothing will be banned outright, but it will become too expensive for electric utilities to continue relying on fossil fuels.”
“On the upside, it’s going to become a hell of a lot cheaper to switch to something green,” the staffer added.
The program might not survive the twists and turns ahead for Mr. Biden’s $3.5 trillion expansion of the social safety net but it has strong support among progressive Democrats.
A particular obstacle for the program is Senate Energy Committee Chairman Joe Manchin III of West Virginia, who is the most conservative Democrat in the upper chamber and a potentially dangerous swing vote for Mr. Biden’s agenda.
Mr. Manchin has promised to fight any significant climate change measure that adversely impacts coal and natural gas. The two resources, which produce nearly two-thirds of all electricity consumed across the U.S., are plentiful in the senator’s home state.
“Anybody moving in a direction where they think they can walk away and just not have any fossil [fuels], that’s just wrong,” Mr. Manchin said earlier this year. “It won’t happen, it can’t happen.”
Mr. Manchin’s stance might wind up being the only one that matters, especially as Democrats cannot risk losing a single vote in the evenly divided Senate if the $3.5 package is to reach Mr. Biden‘s desk.
Democrats plan to force through the massive spending bill without support from a single Republican. They will use a special procedure known as budget reconciliation that allows some tax and spending measures to avert the 60-vote filibuster threshold and pass by a simple majority of 51 votes.